September 16, 2011 / 8:59 PM / 7 years ago

CANADA STOCKS-RIM plunge drives TSX lower; gold gains offset

 * TSX down 161.13 points, 1.3 percent, at 12,263.71
 * RIM sinks 20.1 percent after weak earnings
 * Nine of 10 index sectors weaker; golds rise  (Recasts. Adds further analyst comment)
 By Trish Nixon
 TORONTO, Sept 16 (Reuters) - A plunge in Research In Motion RIM.TO shares following disappointing results sent Toronto’s main stock index tumbling on Friday, offsetting gains in gold stocks.
 BlackBerry maker RIM was the single biggest drag on the market, sinking 20.1 percent to C$23.50 after reporting a steep drop in second-quarter profit on Thursday on limp sales of its smartphones and tablets. [ID:nS1E78E1MR]
 “We’ve been weak vis-a-vis our European and U.S. counterparts,” said Francis Campeau, a broker at MF Global Canada, who noted RIM’s stock alone was responsible for about 25 percent of the move down.
 U.S. stocks rose for the fifth straight session on Friday, and global equities also gained. [.N] [MKTS/GLOB]
 Financial issues weighed heavily on the TSX, falling 1.7 percent as Royal Bank of Canada (RY.TO) slipped 2.5 percent to C$46.30 and Toronto-Dominion Bank (TD.TO) lost 2.2 percent to C$73.55.
 “Bank stocks are driving most of the gains in the U.S. and Europe, and we just aren’t seeing the same gains here in Canada because we never saw the same size declines to begin with over the past two or three weeks,” said Robert Kavcic, economist at BMO Capital Markets.
 “So we’re not getting that same sort of snap back like we’re getting in other markets.”
 The Toronto Stock Exchange’s S&P/TSX composite index .GSPTSE closed down 161.13 points, or 1.3 percent, at 12,263.71, after three days of gains. Nine of the 10 main sectors were weaker, with only health care companies rising.
 But there was strength in precious-metal miners, part of the broader materials sector, as investors shuffled into defensive plays and the price of gold bounced back from a two-week low. [GOL/]
 Silver Wheaton SLW.TO was the most influential gainer, up 4.4 percent at C$39.50, followed by Barrick Gold (ABX.TO), up 0.9 percent at C$52.52.
 Base-metal miners and energy stocks dragged as uncertainties about the resolution of the euro zone debt crisis drove down copper and oil prices. [O/R] MET/L]
 Potash Corp POT.TO fell 3.3 percent to C$54.47, while Canadian Natural Resources (CNQ.TO) sank 2.9 percent to C$34.20 and Cenovus Energy (CVE.TO) was down 4.4 percent at C$32.61.
 “The street is getting out of those sectors into more defensive plays,” added Campeau. “Stocks bounced nearly all week, and short-term traders are taking chips off the table just to face any headline risk that might come from Europe over the weekend.”
 Fears that Greek fiscal woes would bring down the European financial system had eased on Thursday after the world’s leading central banks agreed to boost short-term dollar funding for banks in Europe that have faced a dollar shortage.
 But a sharp decline in French and Italian banking stocks, along with the euro’s slide, indicated caution lingers despite encouraging efforts to resolve the debt crisis. [MKTS/GLOB]
 At a meeting in Poland U.S. Treasury Secretary Timothy Geithner urged EU finance ministers to leverage their bailout fund to better tackle the debt crisis and to start speaking with one voice, but there was no agreement on what steps to take.
 Meanwhile, in the latest U.S. economic data, consumer sentiment inched up in early September, but Americans remained gloomy about the future, with a gauge of expectations falling to its lowest level since 1980. [ID:nS1E78F0G4]  (Editing by Jeffrey Hodgson)                 

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